OFFICE OF THE MINISTER
OF ENERGY AND RESOURCES
The Chair
CABINET ECONOMIC GROWTH AND INFRASTRUCTURE COMMITTEE
ELECTRICITY MARKET REVIEW: TRANSFER OF TEKAPO A AND B TO
GENESIS: RESOURCE CONSENT ISSUES
PROPOSAL
1
This paper seeks agreement to refer the attached Supplementary Order Paper
to the Finance and Expenditure Select Committee considering the Electricity
Industry Bill. The SOP addresses issues associated with the transfer of
resource consents and related agreements affected by the transfer of Tekapo
A and B power stations from Meridian Energy Limited to Genesis Power
Limited
EXECUTIVE SUMMARY
2
The Electricity Industry Bill (the Bill) provides for shareholding Ministers to
issue a direction transferring Tekapo A and B power stations from Meridian to
Genesis. In December 2009 Cabinet agreed [CAB Min (09) 44/8 refers] to
legislate for resource consents to be transferred along with the Tekapo A and
B assets, in a way that:
a
Minimises costs, delays and risks; and
b
Maintains current environmental outcomes and rights and obligations
until the resource consents expire in 2025.
3
Tekapo A and B power stations are part of the Waitaki Power Scheme (WPS).
Resource consents for the WPS were issued as a package in 1991, on the
basis of agreements between the Electricity Corporation of New Zealand
(ECNZ) and affected parties in the Waitaki Catchment. Transferring the WPS
consents relating to Tekapo A and B from Meridian to Genesis splits up the
package, and will affect the way obligations in the agreements can be met.
4
To ensure Cabinet’s objectives are met when resource consents are
transferred, this paper recommends an SOP which:
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a
provides shareholding Ministers a power to issue directions covering
the terms and conditions of a water management agreement;
b
provides a process for making any changes to the WPS consent
conditions required because of the asset transfer; and
2
c
5
includes provisions to require generators to maintain the obligations in
agreements negotiated alongside the WPS consents.
A Supplementary Order Paper (SOP) to this effect is attached. It is
recommended that the Minister of Energy and Resources sends the attached
SOP to the Finance and Expenditure Select Committee (FEC) for
consideration along with the rest of the Bill. It is proposed that the Minister’s
letter and the SOP be released publicly and the FEC be invited to undertake a
short period of consultation with interested parties on the SOP.
BACKGROUND
6
The Bill is currently before Parliament. Clause 124(2)(b) of the Bill provides for
shareholding Ministers to issue a direction requiring the transfer of assets,
rights and obligations relating to Tekapo A and B power stations from Meridian
to Genesis. Clause 125(2)(d) of the Bill will allow Ministers to also specify all or
some of the terms and conditions of any of the contracts required for transfer.
7
In December 2009, Cabinet agreed [CAB Min (09) 44/8 refers] to legislate to
enable resource consents relating to Tekapo A and B1 to be transferred from
Meridian to Genesis in a way that:
8
a
Minimises costs, delays and risks; and
b
Maintains current environmental outcomes and rights and obligations
until the resource consents expire in 2025.
Cabinet invited me to report back on the required legislative amendments and
noted that legislative amendments will be introduced by SOP to the Bill.
The consents were granted as a package
9
1
2
3
The resource consents for the WPS were issued as a package in 1991 to
ECNZ, which operated the WPS at the time.2 ECNZ began consulting with
interested parties in early 1991, when the Resource Management Act 1991
(RMA) was a Bill. Twelve parties3 signed an agreement with ECNZ before the
RMA was passed. The agreement specified the form of the consents and the
conditions. Environment Canterbury (ECan) granted the consents to ECNZ on
that basis.
Consents in the WPS that relate to Tekapo A and B are those that were originally issued as
numbers CRC905301 to CRC9053320.
The consents for the entire WPS are those that were originally issued as CRC905301 to
CRC905366.
The parties to the head agreement are the Minister of Conservation, South Canterbury Fish and
Game, Ngai Tahu Trust Board, Benmore Irrigation Company, The New Zealand Canoe Association
Inc, Mackenzie District Council, Lower Waitaki Irrigation Company, Maerewhenua District Water
Resource Company Ltd, Morven Glenavy Ikawai Irrigation Company, Transit NZ (now the New
Zealand Transport Agency), South Canterbury Royal Forest and Bird Society Inc, NZ Salmon
Anglers Association.
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3
10
Nine of those parties4 also signed separate agreements with ECNZ. The
package of consents and agreements were transferred to Meridian in 1999,
when ECNZ was split. The package of consents expires in 2025.
11
Tekapo A and B stations are part of the WPS. Transferring consents relating
to Tekapo A and B to Genesis splits up the consent package and will affect
the way obligations in agreements negotiated alongside consents can be met.
12
Some stand-alone consents outside of the package also need to be
transferred to Genesis.5
13
The Waitaki Catchment Water Allocation Regional Plan provides for the
allocation of water in the Waitaki Catchment. The transfer of consents is not
affected by the Plan so long as current outcomes, such as minimum flows, are
maintained.
14
ECan is the consenting authority in the Waitaki Catchment. A recent
investigation into its performance under the RMA and Local Government Act
highlighted a 'gap' in its capability to manage freshwater in the Canterbury
Region.6 Governance arrangements for the consenting authority in the
Canterbury Region have changed.
COMMENT
15
4
5
6
Four issues need to be addressed to meet Cabinet’s objectives in transferring
the resource consents. They are:
a
The transfer of the WPS consents relating to Tekapo A and B to
Genesis;
b
Consent conditions that apply across the package of WPS consents;
c
Meridian's role in agreeing to applications for use of water that
derogates from the WPS consents; and
d
The extent to which agreements negotiated alongside the WPS
consents are maintained.
The nine parties are the Director-General of Conservation, the Waitaki Irrigation Company, the
Maerewhenua District Water Resource Company Ltd and the Morven Glenavy Ikawai Irrigation
Company together as one party, Benmore Irrigation Company, South Canterbury Royal Forest and
Bird Society Inc, South Canterbury Fish and Game, The New Zealand Canoe Association Inc,
Mackenzie District Council, Transit NZ (now the New Zealand Transport Agency), and the Ngai
Tahu Trust Board.
The transfer of standalone consents is not problematic. Consents can be transferred without
altering conditions as they are designed for one operator. They are not addressed in this Cabinet
paper.
Investigation of the Performance of Environment Canterbury under the Resource Management Act
and Local Government Act, February 2010, Wyatt Creech et all. The report also noted that “The
issue of freshwater management …is the single most significant issue facing the Canterbury
Region.”
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Transfer of consents
16
The policy is that Genesis will hold all resource consents relating to Tekapo A
and B. Consents can be transferred between parties using the processes in
sections 136 and 137 of the RMA. The transfer would occur by Meridian giving
written notice of the transfer to the consenting authority. The power of
Ministerial direction can be used if Meridian does not initiate the transfer.
Consent conditions
17
However, it is likely that a simple transfer process will not be sufficient for all
consents. Changes to wording of consent conditions may be required. The
WPS consents were issued as a package, and some consent conditions are
common to a number of consents. Simply transferring some of the consents in
the package to Genesis may make some conditions difficult to maintain
because the way they are written does not anticipate two operators of the
WPS. Some consent conditions apply to multiple consents in the package.
Some conditions may be difficult for Meridian or Genesis to meet if they do not
individually control the whole catchment. For example:
a
Condition 22 is an obligation to maintain a minimum flow of at least 120
cumecs in the Waitaki River immediately below the Waitaki Dam. To
meet this condition, Meridian advises that it will depend in part on water
released from Lake Tekapo.
b
Conditions 6, 8 and 9 include an obligation to exercise the consents in
accordance with the Waitaki Operating Rules7. One interpretation of
these conditions is that the rules apply across the whole catchment and
may need to be reformatted in order to be split between two generators.
c
Condition 1 may need to change to reflect that consents do not
anticipate two parties operating in the catchment8. Meridian interprets
condition 1 to require the WPS to be operated in an integrated way.
Another possible interpretation is that rights only need to be exercised
with the other rights that that generator holds. The way in which the
consent is interpreted may affect environmental outcomes, rights and
obligations.
Water management agreement
18
7
8
Meridian and Genesis are working together to develop a water management
agreement to meet consent conditions and to maintain current environmental
outcomes, rights and obligations until consents expire in 2025. Meridian and
Genesis have already initiated discussions.
These rules are the Waitaki Power Development, Appendix A, Extracts of Waitaki Operating Rules,
9 November 1990. Included in the rules are provisions outlining how to operate the lakes in flood
conditions, maximum and minimum flows, and how spill flows should be managed.
Condition 1 says “The Grantee shall exercise this right in conjunction with all other rights which the
Grantee holds in connection with the generation of electricity in the Waitaki River system, in such a
manner as to minimise, as far as practicable, any adverse effects of the exercise of the rights on
the Waitaki River system.”
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19
However, there is no guarantee that generators will conclude an agreement
that meets these objectives. Direction by shareholding Ministers may be
required. Clause 124(2)(d) of the Bill will give shareholding Ministers the
power to specify some or all of the terms and conditions of any contract
required in the asset transfer. When passed, this provision could be used to
ensure that consent conditions for the WPS are met by agreement as much as
possible. For the avoidance of doubt, I propose that the Bill is amended to
provide for shareholding Ministers to direct terms and conditions of a water
management agreement.
Changes to conditions
20
Given the risk that some current WPS consent conditions may be difficult for
two parties to meet because of the way they are worded, the consent
conditions may need to be amended (in addition to the consents being
transferred).
21
Normally, changes to consent conditions, even minor ones, follow the process
set out in section 127 of the RMA:
a
applications are decided by the consenting authority;
b
affected parties may be involved; and
c
decisions are subject to appeal to the Environment Court.
22
This process may be costly for generators, the consenting authority and third
parties. There is high level of interest in water in the Waitaki catchment from
stakeholders including irrigators, conservationists, recreationists, iwi, local
towns and communities. These parties may have an interest in changing the
rights and obligations in the catchment. The process in section 127 may be
used to seek change to current environmental outcomes, rights and
obligations, and delay the transfer.
23
I therefore recommend that the Bill is amended to provide a more constrained
process for making any changes to consents required because of the transfer
of WPS consents relating to Tekapo A and B power stations9. This process will
be used in place of that in section 127 of the RMA, if necessary. The process
would:
a
limit changes to only those necessary to achieve the objective of
maintaining current environmental outcomes, rights and obligations;
b
include the following steps;
i
9
Meridian and Genesis, in consultation with the consenting
authority, must:
The process would not prevent parties in the catchment from using normal RMA processes to
make changes to consents and conditions that are not related to the transfer nor affect the process
of seeking new consents when consents expire in 2025. It is intended to be specific to the transfer
of the Tekapo A and B power stations to Genesis.
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ii
(a)
Identify, and agree to if possible, any necessary changes
to consent conditions; and
(b)
Notify the Minister of Energy and Resources of their views;
The Minister of Energy and Resources, in consultation with the
Minister for the Environment must:
(a)
review the proposed changes to ensure they meet the
objective;
(b)
request advice from the consenting authority as to whether
the changes meet the objective; and
(c)
determine the changes that should be made to the
consent conditions;
iii
The final decision on whether and how to amend the wording of
conditions would rest with Minister. The Minister would inform the
consenting authority of the changes to conditions and notify
changes in the Gazette. Changes would be publicised by the
Minister and the consenting authority, and incorporated into
consents at a time specified in the notice, at, or before, the time
that the consents are transferred.
iv
The consenting authority would not be required to undertake
public consultation in response to the generators' consultation or
in response to the request for advice from the Ministers and must
meet any reasonable time-frames set for providing advice to
Ministers and for issuing revised consents.
Approval for water use that derogates from WPS consents
24
Water in the Waitaki catchment is over allocated. A High Court judgement in
2005 confirmed that the WPS consents allow Meridian to control maximum
possible inflows, rather than average inflows, to ensure that it can control all
water going into the catchment. This is so that Meridian can manage water in
a high water event.
25
As Meridian, in effect, controls all the water in the catchment, anyone seeking
resource consent to use water must first obtain agreement from Meridian
before applying to the consenting authority. These agreements are commonly
called “derogation approvals”, because other consents cannot derogate from
Meridian’s consents without its permission.
26
After the transfer, the WPS consents will still fully allocate all water to Meridian
and Genesis. Genesis and Meridian should work together to establish a
process to ensure that the derogation approvals process is not complicated or
delayed following the transfer of consents. Provisions to address this issue
could be included in a water management agreement.
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Agreements negotiated alongside the WPS consents
27
As noted, Meridian has a number of agreements with other parties in the
Waitaki Catchment that were originally negotiated alongside resource
consents in 1991. These include a head agreement and nine other
agreements. The rights and obligations that form the basis of these
agreements are related to the consents as they are granted, and form part of
the current environmental outcomes, rights and obligations in the catchment. I
consider that they should be maintained as closely as possible.
28
In addition, Meridian has several other agreements relating to water use in the
WPS area, notably an agreement with the Mackenzie Irrigation Company
which provides water in the Upper Waitaki for irrigation by way of derogation
from WPS consents and a lease agreement with Mount Cook Alpine Salmon
for salmon farming operations in the Tekapo canals.
29
In order that the agreements in paragraphs 27 and 28 can be preserved and
obligations continue to be met, the relevant agreements should be specified in
the Bill, and Meridian and Genesis should enter into arrangements to meet the
obligations that are affected by the Tekapo A and B asset transfer.
30
It is not unusual to need to deal with agreements when an asset is sold, and
the arrangements made to deal with these agreements should be done by
Meridian and Genesis as a normal commercial arrangement (subject to the
paragraphs below). Meridian may retain some agreements, or they may be
transferred in whole to Genesis. Genesis may become a party to some
agreements so that Meridian and Genesis share the agreements, or the
agreements may be split.
31
Some obligations cannot remain solely with Meridian because there is a risk
that Meridian will not be able to meet the obligations without control of Tekapo
A and B, or that third parties could commence litigation against Meridian
because of perceptions that it is not able to meet all its obligations.
32
There is a risk that Meridian and Genesis could fail to reach agreement about
the arrangements in relation to the agreements, or that generators could reach
agreement but that the third parties do not want to enter into new agreements.
33
To ensure that these agreements are dealt with by the parties and that the
policy of preserving current rights and obligations is achieved, I recommend
that the Bill is amended to provide that the Ministerial powers of direction can
be used to:
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a
direct Meridian and Genesis to negotiate the retention, transfer, sharing
and/or splitting of the agreements (as specified in legislation) between
themselves and then to offer any necessary replacement agreements to
the third parties which maintain the rights and obligations in the existing
agreements before a specified date;
b
on a specified date (if arrangements for current and/or replacement
agreements have not been agreed, but prior to the transfer of
consents), direct Meridian and Genesis as to:
8
i
which agreements are to remain with Meridian
ii
which agreements are to transfer from Meridian to Genesis;
and/or
iii
which agreements are to be shared between the generators by
Genesis becoming a party to the agreements in addition to
Meridian.
34
The Bill should be amended to provide that any new agreements apply in
place of the old agreements and bind the parties, notwithstanding anything to
the contrary in any rule of law. A third party would have the right to have no
agreement at all, either continuing or offered, if it chose not to.
35
Some agreements terminate in the event that Meridian ceases to control the
entire WPS. Third parties may not wish contracts to terminate simply because
of the split of the WPS. The Bill should be amended to provide that any
agreements that are allocated to one or both of the generators continue to
apply despite anything to the contrary.
36
This outcome would, as far as is practicable, maintain all of the rights and
obligations of the existing agreements, in accordance with the policy objective.
It would also provide a greater degree of certainty for the other parties, and
allow the agreements, or varied or replaced agreements, to continue after the
Tekapo A and B asset transfer.
CONSULTATION
37
This paper was prepared by the Ministry of Economic Development, with input
from the Ministry for the Environment (MfE) on developing options. MfE
agrees with the conclusions reached.
38
The Treasury, the Department of Conservation, Ministry of Agriculture and
Forestry, The Ministry of Justice, and Te Puni Kokiri were consulted on the
paper and the Regulatory Impact Statement. The Department of Prime
Minister and Cabinet has been informed.
39
Meridian was significantly involved in identifying potential issues. Meridian and
Genesis have been consulted on options for legislation. While Meridian
maintains that transfer of consents is not necessary, it considers that this
policy is a realistic alternative. Genesis would prefer legislation that dealt with
the transfer in more detail and, given its advice that the split will cause no net
adverse environmental effects, it sees no need to involve RMA processes in
this instance.
40
Environment Canterbury
recommendations.
41
Ngai Tahu was informed and considers there was inadequate consultation
prior to Cabinet’s decision to transfer the Tekapo A and B stations in
December 2009.
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was
consulted
and
broadly
agree
to
the
9
FISCAL IMPLICATIONS
42
There are no fiscal implications in this paper.
HUMAN RIGHTS
43
There are possible inconsistencies with three Bill of Rights Act (BORA) rights:
Freedom of expression (section 14), freedom of association (section 17); and
natural justice rights (section 27(1)).
44
However, the Ministry of Justice considers that any potential infringement on
those rights is a justifiable limitation, and as such the SOP appears to be
BORA consistent.
COMPLIANCE
45
The Supplementary Order Paper complies with:
a
Principles of the Treaty of Waitangi;
b
Rights and freedoms contained in the New Zealand Bill of Rights Act
1990 and the Human Rights Act 1993 (see above);
46
c
Principles and guidelines set out in the Privacy Act 1993;
d
Relevant international standards and obligations.
The Supplementary Order Paper does not comply with the LAC guidelines:
Guidelines on Process and Content of Legislation, because there will be no
appeal rights if a person is dissatisfied with a changed consent condition.
a
Non-compliance is justified because:
b
The SOP will apply to a specific, identifiable group;
c
It will primarily apply to Meridian and Genesis; two SOEs;
d
Its purpose is to avoid cost, risk and delay in the transfer of resource
consents relating to Tekapo A and B. It will only apply to that one-off event;
e
Environmental outcomes, rights and obligations are to be maintained,
so no party should lose or gain rights in the transfer.
BINDING ON THE CROWN
47
Clause 3 of the Electricity Industry Bill states that the Act will bind the Crown.
The Supplementary Order Paper does not amend existing Acts, and does not
change the provisions in the Electricity Industry Bill in the way they bind the
Crown.
CREATING NEW AGENCIES OR AMENDING LAW RELATING TO EXISTING AGENCIES
48
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The Supplementary Order Paper does not create new agencies or amend law
relating to existing agencies.
10
ALLOCATION OF DECISION MAKING POWERS
49
The Supplementary Order Paper allocates decision-making power to the
Minister of Energy and Resources, in consultation with the Minister for the
Environment, to make orders which change resource consent conditions. It will
replace the normal process in the RMA.
50
The process is necessary to avoid cost, risk and delay in the transfer of
resource consents. While decisions made by the Minister cannot be appealed,
he must seek representations from the consenting authority. The Minister of
Energy and Resources is to be delegated the power, in consultation with the
Minister for the Environment as the Minister of Energy and Resources is
responsible for the Electricity Industry Bill and the development and
implementation of the SOE asset re-configuration policy. Current
environmental outcomes, rights and responsibilities are to be maintained, so
environmental expertise is not central to the power.
51
The Minister’s power will be limited to changes which:
a
are necessary to maintain current environmental outcomes, rights and
obligations; and
b
cannot be avoided by means of a direction to Meridian and Genesis to
conclude a water management agreement.
ASSOCIATED REGULATIONS
52
No regulations are necessary to bring the contents of the Supplementary
Order Paper to the Electricity Industry Bill into operation.
DEEMED REGULATIONS
53
The Minister will have the ability to make orders which change resource
consent conditions for the WPS in certain strict circumstances. These orders
will be deemed regulations for the purposes of the Regulations
(Disallowances) Act.
54
As noted above deemed regulations are necessary to maintain current
environmental outcomes, rights and obligations, and avoid cost, risk and
delay. They will affect a particular set of resource consent conditions and
Meridian and Genesis only, as the consent holders.
DEFINITION OF MINISTER/DEPARTMENT
55
The term Minister is defined in Part 1 of the Electricity Industry Bill as the
person with the authority of the Prime Minister in relation to that provision or
part. The Minister of Energy and Resources is intended to be the Minister in
relation to the provisions in the Supplementary Order Paper. The
Supplementary Order Paper will include a requirement for the Minister to
consult with the Minister for the Environment.
56
Cabinet Office has been consulted and is satisfied on these definitions.
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COMMENCEMENT OF LEGISLATION
57
The Supplementary Order Paper will come into force with the rest of the
Electricity Industry Bill.
PARLIAMENTARY STAGES
58
The Supplementary Order Paper to the Electricity Industry Bill will be referred
to the Finance and Expenditure Select Committee in April 2010.
59
The Finance and Expenditure Select Committee is due to report the Electricity
Industry Bill to the House on 16 June 2010.
60
The intended enactment date for the Electricity Industry Bill is August 2010.
REGULATORY IMPACT ANALYSIS
61
Regulatory Impact Analysis Requirements: A number of the proposals in this
paper will lead to legislation. A Regulatory Impact Statement (RIS) has been
prepared and is attached to the paper. The RIS examines options in the
context of the previous decision made by Cabinet to transfer resource
consents in a way that minimises costs, delays and risks, and maintains
current environmental outcomes, rights and obligations until consents expire in
2025.
62
Quality of the Impact Analysis: The Regulatory Impact and Analysis Team at
Treasury determined that this is not a "significant" regulatory policy and did not
review the Statement.
63
The Deputy Secretary, Economic Strategy Branch, Ministry of Economic
Development and the Regulatory Impact Analysis Review Panel have
reviewed the RIS prepared by the Ministry of Economic Development and
associated supporting material, and considers that the information and
analysis summarised in the RIS is sufficiently comprehensive and robust, and
effectively communicated to enable Ministers to fairly compare the available
policy options and take informed decisions on the proposals in this paper.
64
Consistency with Government Statement on Regulation: I have considered the
analysis and advice of my officials, as summarised in the attached Regulatory
Impact Statement and I am satisfied that, aside from the risks, uncertainties
and caveats already noted in this Cabinet paper, the regulatory proposals
recommended in this paper:
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a
Are required in the public interest
b
Will deliver the highest net benefits of the practical options available,
and
c
Are consistent with our commitments in the Government statement
“Better Regulations, Less Regulation.”
12
PUBLICITY
65
The decisions in this paper will be released by the Minister of Energy and
Resources when referring the SOP to the Finance and Expenditure Select
Committee.
RECOMMENDATIONS
66
It is recommended that the Committee:
1
Note that clause 124(2)(b) of the Electricity Industry Bill will allow
shareholding Ministers to direct the transfer of Tekapo A and B power
stations from Meridian to Genesis;
2
Note that in December 2009, Cabinet agreed [CAB Min (09) 44/8
refers] that legislation should be introduced by Supplementary Order
Paper to enable resource consents relating to Tekapo A and B to be
transferred from Meridian to Genesis in a way that:
2.1
Minimises costs, delays and risks; and
2.2
Maintains current environmental outcomes and rights and
obligations until resource consents expire in 2025;
3
Note that resource consents can be transferred using sections 136 and
137 of the Resource Management Act 1991 and the power of
Ministerial direction in section 124(2)(b) of the Electricity Industry Bill;
4
Note that generators intend to develop a water management
agreement to enable them to meet consent conditions and obligations
in stakeholder agreements;
5
Agree to amend the Electricity Industry Bill to provide shareholding
Ministers with a power to issue directions relating to the terms and
conditions of a water management agreement;10
6
Note that, prior to a transfer of consents, minor changes to consent
conditions may be required to maintain current environmental
outcomes, rights and obligations;
7
Agree to provide a constrained process for making any changes to
Waitaki Power Scheme consent conditions required by the transfer of
consents relating to Tekapo A and B power stations to be used in place
of section 127 of the RMA, which:
7.1
10
limits changes to only those necessary to maintain current
environmental outcomes, rights and obligations;11 and
Cabinet agreed to the follow recommendation, which replaces Recommendation 5:
“Agree to amend the Electricity Industry Bill to provide shareholding Ministers with a power to
issue directions relating to the terms and conditions of a water management agreement in
order to facilitate the transfer of Tekapo A and B to Genesis”
11
Cabinet agreed to the following recommendation which replaces recommendation 7.1:
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13
7.2
includes the following steps:
7.2.1 Generators, in consultation with the consenting authority,
must:
7.2.1.1
Identify, and, if possible, agree to any necessary
changes to wording of conditions; and
7.2.1.2
Notify the Minister of Energy and Resources of
their views;
7.2.2 The Minister of Energy and Resources, in consultation
with the Minister for the Environment must;
7.2.2.1
review proposed changes to ensure they meet
the objective;
7.2.2.2
request advice from the consenting authority as
to whether the changes meet the objective;
7.2.2.3
determine the changes that should be made to
the consent conditions;
7.2.3 The final decision on whether and how to amend the
conditions would rest with the Minister and the Minister
would inform the consenting authority of the changes to
conditions and notify changes in the Gazette;
7.2.4 The consenting authority is not required to undertake
public consultation in response to the generators’
consultation in recommendation 7.2.1 or in response to
the request for advice in recommendation 7.2.2.2 and
must meet any reasonable time-frames set by the
Ministers for providing advice and for issuing revised
consent conditions;
8
Note that Meridian has agreements with third parties that were
negotiated alongside resource consents or relate to use of water in the
Waitaki Power Scheme;
9
Agree to maintain the agreements referred to in recommendation 8 in
the transfer of Tekapo A and B assets, by amending the Electricity
Industry Bill to:
9.1
Provide shareholding Ministers the power to:
9.1.1 direct generators to enter into arrangements to meet
obligations under the agreements, by agreeing to retain,
transfer, share and/or split agreements by a specified
date and to offer any necessary replacement agreements
“limits changes to only those necessary to maintain current environmental outcomes, rights
and obligations in order to facilitate the transfer of Tekapo A and B to Genesis”
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to the third parties which maintain the rights and
obligations in the existing agreements before a specified
date;
9.1.2 direct generators, on or after a specified date, as to which
agreements should be met by each generator and/or
which agreements should be met by both generators; and
9.2
Provide that any new agreements apply in place of the old
agreements and bind the parties, notwithstanding anything to the
contrary in any rule of law (noting that third parties retain the
right to have no agreement at all if they choose not to);
10
Note that the Electricity Industry Bill is currently before the Finance and
Expenditure Select Committee, which is due to report back to
Parliament in June;
11
Agree that a Supplementary Order Paper includes the amendments
agreed in recommendations 5, 7, and 9;
12
Invite the Minister of Energy and Resources to refer the Supplementary
Order Paper to the Finance and Expenditure Select Committee to be
considered with the rest of the Electricity Industry Bill, which holds
priority 2: must be passed in 2010 on the 2010 legislation programme;
13
Agree to the public release of the attached Supplementary Order Paper
to the Electricity Industry Bill, subject to the final approval of the
government caucus;
14
Agree that this Cabinet paper and Regulatory Impact Statement is
released on the Ministry of Economic Development website.
Hon Gerry Brownlee
Minister of Energy and Resources
Date signed:
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